Andrew Burrell – It's an alarming statistic that helps explain Indonesia's economic, political and social predicament: about 110 million people are scraping by on less than $US2 ($2.70) a day.

And for Indonesia's security-conscious neighbours, this is a number that should be resonating far more deeply than the latest arrest count from the Bali and Marriott Hotel terrorist bombings.

While macro-economic stability and higher growth in the past few years have lowered Indonesia's poverty rates from earlier post-crisis levels, the enormous, dangerous chasm between rich and poor remains.

According to a new report by the World Bank, Indonesia should be focusing more attention on "pro-poor growth", such as improving roads in rural areas, where 78 per cent of the poor live, and scaling up community-driven development programs to empower the poor.

As the bank pointed out on Monday, about the same number of Indonesians who survive on less than $US2 a day about 53 per cent of the total population also lack access to basic services such as water and sanitation.

The provision of other essential services, such as health and education, is woeful. The absenteeism rate among doctors in health clinics is a staggering 42 per cent, while the average first-grade school teacher attends school for less than three hours a day. The maternal mortality rate in Indonesia is two times higher than in the Philippines and five times higher than in Vietnam, both poorer countries.

Targeted measures aimed at improving the lot of the poor are proving ineffective: about 74 per cent of those who receive subsidised rice through a major government scheme are not, in fact, poor.

Corruption the root of many of Indonesia's woes also affects the poor disproportionately.

"Because of weak information, poor organisational capacity and lack of skills, the poor are unable to take effective, systemic actions to demand higher levels of accountability," the World Bank said.

A few hours after the release of the World Bank report, one of Indonesia's most important Muslim leaders, Syafii Maarif , was speaking at a different event across town in Jakarta, but he was exploring remarkably similar themes.

Maarif, the chairman of Muhammadiyah, Indonesia's second biggest Islamic organisation, is a relative rarity in Indonesian public life: a reform-minded individual who calls a spade a spade.

And on Monday night, in front of hundreds of people attending a conference on security in the Asia-Pacific region, the moderate Muslim leader was pulling no punches about the economic and political situation in his country, and even about the state of his religion.

Maarif's thesis was that Indonesia's corrupt ruling elite had completely failed the poor, who live in extreme poverty with no access to a reliable justice system or other key services.

He said a resurgence of radicalism should be understood as a response to the "pervasive sense of disenfranchisement" engulfing ordinary Muslims as they grappled with the forces of change.

"When the deprived see that the state and the government have not come to their defence, they feel abandoned," Maarif told a captive audience that included Australia's Foreign Minister, Alexander Downer.

"When they see there is no way out, they become frustrated. When the state becomes an accomplice in maintaining the gap between the privileged and deprived, they get angry.

"Confusion, frustration, despair, and anger soon find expression in many forms, some through violent means, initially aimed at what they see as injustice, moral decadence and religious bankruptcy." Maarif also addressed Indonesia's vast inequality. "While a few hundred parents send their children abroad for a better education, tens of millions of others are still struggling to buy even a simple book for their children.

"When some of these 'new rich' insist on sending their children to the best hospitals around the world even when they catch a simple flu, millions of other parents can only pray and watch their children lying on simple wooden beds helplessly.

"Millions of Muslims in Indonesia cannot understand why hedonism and consumerism, with all its consequences for morality, are allowed to flourish unabated by the state." Maarif then turned his attention to his own faith, arguing that Indonesia's Muslim communities tended to blame others for their own lack of progress, rather than engaging in any critical introspection.

"The argument that Islam is not compatible with democracy will sustain the injustice, corruption, oppression, despotism and authoritarianism so pervasive in many parts of the Muslim world, including in Indonesia.

"In fact, Islam is full of references to the principles of democracy and pluralism and the importance of human rights." It was thought-provoking stuff. But as one audience member pointed out, such arguments are more productive when conveyed to ordinary Muslims in mosques, rather than foreign security experts sitting in a five-star hotel.